The previous bear market lasted 335 days, and investors are currently overjoyed to see the price of various cryptocurrencies rise in 2023. If you’ve been paying attention to market trends, you’ve probably heard many people talk about a bull market return. This prompted us to explain what a bull market is and offer some tips for riding the cryptocurrency wave.
What is the Crypto Bull Market
Have financial experts heard that a particular asset is in a bear or bull market? Interestingly enough, many technical terms in the world of crypto are associated with animals (just think of “whales” and phrases like “hawk-ish”, “dove-ish”, and so on). So what does it mean when an asset is in a bull market? Simply put, it’s seeing the prices of cryptocurrencies rise and noticing an upbeat atmosphere surrounding the topic. Logically, if the opposite occurs, we say that an asset is in a bear market.
This can bring up several topics of discussion, such as when do we know we are in the midst of a bull market? Well, it’s not something set in stone, but as a rule of thumb, prices need to rise at least 20% for a bull run. Is this happening right now? Since the beginning of 2023 until the start of February, Bitcoin has seen a 43% jump in price, alongside other popular cryptocurrencies.
The next thing that might come to mind is, how long does a bull market last? There are several theories as to the length of bull markets. Most financial experts state that there are two tendencies – secular and cyclical. Secular markets run for around five years, whereas cyclical markets are shorter, anywhere from a few months to a year.
Lastly, purely from an etymological perspective, why did people choose these two animals to represent the aforementioned market trends? There are several theories, the most popular one relating to the behavior of the two animals – bulls attack upward, whereas bears attack by slashing down, which corresponds to the two market definitions, prices going up drastically and prices dropping dramatically.
Overview of the 10 Tips: TLDR version
If you are short on time and want the TLDR version, here are the top 8 must-know bull run tips at-a-glance:
- Increase your portfolio diversity.
- Identify attainable investing objectives.
- Gather independent research.
- Consult a crypto broker for advice.
- Create a long-term plan of action.
- Sell in increments.
- Manage the impact of your emotions.
- Stay in the loop with market developments.
Now that you know the top 8 tips, let’s dig a little deeper and discuss what each one entails.
Diversify Your Portfolio
Don’t just stick to one cryptocurrency; add several to your portfolio. This entails broadening your investments across asset variants. Instead of putting your eggs all in one basket, all this says is to choose several cryptocurrencies to capitalize from. Remember, it’s more important to buy quality rather than quantity.
Set Realistic Investment Goals
Developing a real strategy for your investments is your best bet when it comes to navigating a bull run. Plenty of online apps and websites can help you test out strategies, for example, by giving you free credit to play with until you find a strategy that works. One of the most effective ways to learn crypto strategies is through experimentation with simulators and demos, which brings us to our next point.
Get Advice From a Crypto Brokerage
Many investors underestimate the advantages of pairing with a crypto broker. Crypto brokers can assist you with guidance on purchasing digital assets, and ways to trade them on the market. They even offer demos for those who are entirely new to the trading scene. Crypto brokers are so-called mediators between the two parties willing to trade their crypto.
You can easily pair with a crypto broker when you sign up on the appropriate platform. No matter where you are in the world, a space like Bit Alpha AI can get you in touch with passionate brokers, ready to answer your questions 24/7. Whether you want to minimize risks, use special trading software or get tips and insight, you can get the assistance you need using BitCoin 360 AI. And what better time to start than during a bull run?
Forget About FOMO
We all get compelled by the fear of missing out. Everyone worries they might miss the next big hit when the market goes up. You, just like the rest, want to take advantage of the price increase. The problem is that it can be an easy way to lose money. If you buy when prices are sky-high, the market will most likely correct (drop at some point), and you will lose money. Forget FOMO, and make sure to invest on your own terms.
Do Your Own Research
Yes, receiving advice from a crypto broker is important, but so is conducting your own research. You can find tons of updates online on ongoing market developments. A great place to start is YouTube, however, don’t take all advice from YouTubers as gospel – you shouldn’t base all your financial decisions based on the opinions of influencers. As market prices rise, everyone is looking for the next coin that could potentially boom in value, and influencers are stumbling to give advice on where you should invest next.
You can check out videos like Brian Jung’s one, which details the economic prerequisites leading to the 2023 bull run. He also credits his source material, another important factor when doing research on crypto topics.
Sell in Phases
Selling crypto in stages during a bull run, also known as “dollar cost averaging” might help limit the risk of selling at a market high and perhaps suffering significant losses. An investor can potentially lessen the impact of short-term price fluctuations and realize a more consistent return on their investment by selling in increments over time. As enticing as it might sound to sell all of your crypto assets when prices are skyrocketing, this tactic can also help you contain your emotional state, and avoid making rash decisions. Additionally, selling in a controlled and methodical way can help you keep a long-term perspective.
Don’t Get Too Wrapped Up
To expand on the above, it’s important to acknowledge that there are no certainties in the crypto market. Do you know which cryptocurrency investment is the worst? Emotional investment. Even if the markets are booming and your portfolio is increasing steadily, it’s essential that you remember to take a break from the charts occasionally. For this reason, many experts advise that you plan an exit strategy.
Bull markets tempt investors to hold on for one more day in order to make more gains. This can continue for a long time, and while all trading is associated with some sort of money loss risk, prices can’t always be on the rise. Choose a certain price in advance and make sure to leave the market when your portfolio hits that sum. Yes, you could lose out on some potential money, but the losses can be much greater if you encounter a price drop instead.
Keep On Top of Market Developments
Whatever strategy you choose, it is critical to keep track of your investments on a regular basis. This entails monitoring market trends, company performance, and economic indicators that may have an impact on your portfolio. You can position yourself for success in a bull market by staying informed and making knowledgeable investment decisions.
Check out FOMC meetings and their updates (very useful for those of you who are US-based), which evaluate economic and financial conditions and discuss topics such as price stability, inflation, and other factors that contribute to changes in the crypto market. They are held eight times a year, and FOMC meeting summaries can be found published online.
Lastly, using reliable crypto websites like CoinMarketCap can help you monitor changes in digital asset prices, and you can even set up notifications whenever a development occurs. It’s necessary to exercise caution and conduct careful analysis before making investments because the cryptocurrency market is extremely volatile and vulnerable to quick price fluctuations.
The Bottom Line
As a whole, the cryptocurrency industry is a dynamic sector with a plethora of prospects for investors. You can improve your chances of success and optimize your rewards by adhering to these eight essential bull market principles. Of course, before you rush into a crypto investment, it’s best to consolidate your own research and speak to a financial professional, or a crypto broker to get a second opinion. As usual, let’s not forget that digital asset trading comes with substantial risk, so remember to always invest what you can afford to lose.